- Flowtech Fluidpower warned of flat profit growth for 2020 after reporting that revenue climbed just 1.2% as Brexit uncertainty weighed on performance.

For 2019, the company said it expected to report revenue of £112.5m and underlying pre-tax profit of £9.0m.

'2019 was undoubtedly a disappointing year, with volumes inflated as customers built up stock ahead of a Brexit hiatus that never occurred, Flowtech said. 'As the year progressed, we saw a significant slowdown in some of our key end markets, most particularly cyclical services associated to our OEM business, which culminated in the profit downgrade of 14 January 2020.'

The company pledged to target revenue growth in 2021, and when coupled with further planned cost savings should deliver 'significant ' leverage to both margins and profit.

The annualised savings were estimated at £1.4m, with a £0.8m impact in 2020. Combined with an additional £0.2m saving from the closure of three of our smaller sites in late 2019, this produces aggregate annualised savings of £1.6m.

The cash cost of this restructuring was estimated at £1.8m, with £0.9m relating to capital investment in IT upgrades and additional Kardex racking systems, it added.

'At this stage, we expect revenue for the full year 2020 to be down by low single digit percentage points, with a weak first half largely offset by a return to growth in the second, leaving underlying profit at a similar level to 2019,' the company said. A return to revenue growth in 2021, coupled with further planned cost savings, should deliver significant leverage to both margins and profit,' the company said.

At 8:23am: [LON:FLO] Flowtech Fluidpower Plc share price was +2.6p at 99.6p

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